Risk-Sharing

European lenders face multiple, long-term challenges. Banks need to improve their return on equity in addition to meeting higher capital and liquidity standards. For non-bank lenders, a key challenge is to access alternative sources of growth capital at an acceptable cost. Overall, the new market and regulatory environments are forcing European lenders to adjust their business model and use their balance sheet resources more efficiently.

Risk-sharing transactions are a flexible capital management tool first developed 20 years ago and used by the largest European banks for the past 15 years. Properly structured, they allow lenders to recycle capital and free up credit lines to support new lending.

Risk-sharing represents a strategic investment opportunity to earn stable risk-adjusted returns and access diversified, performing pools of credits that are typically not available in the public credit markets.